Bethard to be sold for €9.5 million by Esports Entertainment
Author:
Muhammad Gregory
Esports and iGaming company Esports Entertainment Group (EEG) has announced a share purchase agreement to sell its online casino and sportsbook brand Bethard. The deal has been agreed between EEG and an undisclosed entity that will pay €9.5 million for Bethard, which is licensed to operate in Malta and Sweden.
Esports and iGaming company Esports Entertainment Group (EEG) has announced a share purchase agreement to sell its online casino and sportsbook brand Bethard.
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Aiming to expand further across their two primary verticals of gaming and iGaming, EEG is a full-stack online betting and esports entity that has an impressive partnership portfolio that used to have names like FIFA, NBA, NFL, NHL, and more. EEG is also the official esports provider for the Indian Gaming Esports Association (iGEA), which was established to boost the participation of native tribal members in esports whilst creating a connection to tribal casinos. As a result, EEG has exclusive access to a substantial portion of the North American casino industry. EEG iGaming holds online casino and sportsbook licenses that operate primarily in Europe. The entity uses its own proprietary technology to facilitate various transactions and casino integrations on its platform.
Bethard was established in 2012. More than ten years later, the brand is one of the largest iGaming platforms in the world. Nine years after its establishment, Malta-based EEG swooped in and completed a €16 million acquisitions of Bethard from the Gameday Group, through which it entered the Swedish gambling market in July 2021, as Bethard already held a Swedish and Spanish gambling license. The Malta-based online casino and sports betting provider had caught the eye of EEG after declaring a net annual revenue of a little over €29 million in 2020. Almost two years later, EEG is selling Bethard and has already agreed to a fee of €6.5 million lower than what EEG had paid to acquire the Maltese iGaming entity in what looks like a distress sale to reduce the company’s debt.
An approximate sum of €9.5 million was determined by both entities as the total purchase consideration. That sum is split further into multiple parts comprising a cash payment of €1.65 million at closing before payment of €6.5 million that releases EEG from the payment of contingent consideration liability from the Bethard takeover. The undisclosed acquirer of Bethard will assume liabilities of approximately €1.2 million. A cash holdback of €0.15 million is possible according to the sale terms that have been set in the purchase agreement. This allows the undisclosed acquirer of Bethard to retain the aforementioned sum if the liabilities go beyond the agreed-upon amounts in the agreement. The take-over of Bethard is expected to reach its completion within a couple of weeks.
The new CEO of EEG, Alex Igelman, conveyed his thoughts about the entity focusing on the primary assets in its possession whilst reducing EEG’s debt.
“I am very pleased at the work that is being undertaken to reduce debt and focus on our core iGaming and esports assets. We remain committed to building a world-class esports gambling operation that is global in reach and that provides esports content and strategic services to those involved in esports gambling, as well as those seeking to enter the market. I am extremely encouraged and pleased with the speed and efficiency in which senior management effectuated these important actions.”
Igelman at the helm as EEG switches to survival mode
Igelman has spent less than two months at EEG in the CEO’s chair as he was brought in after the former CEO and co-founder of EEG was asked by the board to relinquish his position after a challenging year for the company that was close to dissolution and getting delisted on NASDAQ. However, the group received a green light in November 2022 from the Nasdaq Hearings Panel to continue its listing on the NASDAQ Captial Market.
In an extremely tough 2022, EEG had to sell several assets to reduce debt. Distress sales have seen the Malta-based entity sell assets for a lower-than-expected price. Bethard is the latest one which falls into the same bracket. The acquisition of Bethard was completed for €16 million in 2021 but the sale of the top-notch brand has only given EEG €9.5 million As Igelman settles in as CEO, a new challenging year awaits EEG.
Bethard’s sale follows the closure of Argyll
Weeks before the arrival of Igelman, EEG contemplated closing one of its iGaming operators in the United Kingdom and Ireland. On December 7th, 2022, EEG officially announced the closure of Argyll iGaming in the two countries as the entity required exorbitant operational costs without generating any profit. Hence, the curtains dropped on the UK-based provider before the arrival of the new CEO.
The intention of EEG is to sell assets that are not part of the core iGaming ecosystem at EEG. After the closure of Argyll and the sale of Bethard, the Malta-based entity is set to focus on the operations of its Lucky Dino iGaming brands. These brands are operating via EEG’s proprietary Idefix platform. The company seems to be on the right track to reduce its debt as it has already brought the figures down from €30.2 million to €14.5 million within a span of five months. EEG also closed its Spanish gambling license last month.
